Which Market Trends Are Right – A person who chooses to use the Dow Theory and the Volume Theory of stock investments in the marketplace for making his or her buying and selling decisions should know a few things about the two options. The reasoning behind this is that there are advantages and disadvantages to both and the two can be best used to work in conjunction. The disadvantages of these two theories are outlined in the following paragraphs. The two main advantages and disadvantages are analyzed as well.
About Market Trend
The market trends provide a summary of what has happened in the market for a period of time. It will not predict the future because markets are always changing. The current trend will begin to take shape when investors are making their predictions of how long the market will continue to move up or down.
The common filters and trends offered by the Dow Theory and the Volume Theory only work on that single date. They do not give any indication on whether or not the market will follow that same direction. However, the market trends do show a trend in the direction that will determine whether or not it will continue to move in that direction or not.
The important thing to remember is that time is very important in the market. Once the past trends of the market have been seen, there is no indication on whether or not it will continue to go in that direction. Market trends are important but they do not give any indication of the direction of the market.
Which Market Trends Are Right – Future Trends about Market
By studying market trends, you can get an idea of where the market will go in the future. However, you should not be very concerned about these patterns and trends. You should understand that they are only a snapshot in time and will not tell you how things will turn out.
Stocks are made up of a number of constituents including the company, its managers, management team, shareholders, officers, etc. To determine the long term trends in the market and the direction that a particular company will take in the future, it is important to understand the other factors that have influence on the company’s price action.
In the beginning of the market, stock prices fluctuate depending on the various forces that are involved in the stock trade. Stock prices usually reach a higher level in the middle of the day then they will be lower in the evening. The price of a stock is influenced by the factors mentioned above that relate to the market.
When stock prices go up in the afternoon, there are factors that led to that increase. The factors include the news story, the increase in company performance, an announcement of a special dividend or buyout, etc. When the price of a stock starts to climb, the market trends and the common filters that are often used in stock trading can be used to forecast that the stock price will continue to rise.
Affect on Stock Price
The price of the stock prices are also affected by the movements of the market. When the market tends to have a downward pull on a stock, the price may fall below the strike price for a short period of time. This is how the price action is used by some people when they study the market trends.
When the right market trends of a stock are analyzed, you may find that it is already in a decline. When the market trends are used by those who study stocks, it is a good indication that a stock will continue to decline. However, when the market trends are used in conjunction with other indicators, it can prove to be helpful in predicting whether a stock will be rising or falling.
The market trends offer a detailed look at the history of the stock prices. It is important to remember that stock prices change so a thorough analysis of the market trends is important. By carefully examining the market trends, you can determine which direction the stock prices will likely go next.
With so many different factors influencing the market and stock market, it is important to use both, common filters and market trends to make your trading decisions. The market trends can give you the first indications of how the market may progress but the common filters should be used to determine if the market trends are correct. and you can always use common filters to verify the market trends.